2023-12-11 21:50

CAIRO, Dec 11 (Reuters) - Kuwait reaffirmed its rejection for the inclusion of any call for phasing out fossil fuels consumption and production in the COP28 draft final climate deal, Oil Minister Saad Al Barrak said in statements to Kuwait's state news agency (KUNA) on Monday. However, the minister said his country deeply believes in the need to cut greenhouse gas emissions to protect environment. "This goal could be achieved through the introduction of new technical and control solutions", he argued, noting that ditching fossil fuels "would, undoubtedly, gravely impact the global economy and create enormous problems for the energy sector and the development process." OPEC's top Arab energy ministers arrived in Doha on Monday for the 12th Arab Energy Conference as countries clash at the UN's COP28 climate summit over a possible agreement to phase-out fossil fuels. https://www.reuters.com/sustainability/climate-energy/kuwait-refuses-inclusion-fossil-fuels-phase-out-call-cop28-draft-deal-oil-2023-12-11/

2023-12-11 20:54

Dec 10 (Reuters) - An investor group consisting of Arkhouse Management and Brigade Capital has made a $5.8 billion offer to take department store chain Macy's (M.N) private, according to a person familiar with the matter on Sunday. Arkhouse Management, a real-estate focused investing firm, and Brigade Capital Management, a global asset manager, submitted a proposal to acquire the Macy's stock they don't already own for $21 a share on Dec. 1, the person said. The Wall Street Journal reported the offer earlier on Sunday afternoon. The offer for the Bloomingdale's parent is a 20.76% premium from its closing at $17.39 on Friday. Macy's shares were trading at $20.13, or up nearly 16% on Monday. Fellow department store operators Kohl's (KSS.N) and Nordstrom (JWN.N) also rose about 6%. The investor group already has a big stake in Macy's through Arkhouse-managed funds and has discussed the proposal with the department store chain, whose board subsequently met to discuss the offer. It is not clear how the retailer views the proposal, the person familiar with the matter said. "The buyout group is undoubtedly interested in Macy's large real estate portfolio, which has attracted activists and potential buyers in the past," Morningstar analyst David Swartz said in a note. J.P. Morgan analysts estimate Macy's total real estate value at about $8.5 billion, or $31 per share, including the iconic Herald Square property worth about $3 billion. Arkhouse and Brigade believe Macy's is undervalued in the public markets and have indicated a willingness to raise the offer subject to due diligence, the WSJ report said, adding that an investment bank has provided a letter supporting the group's ability to raise the necessary financing to get through the deal. Macy's and Brigade declined to comment, while Arkhouse did not respond to Reuters request for comment. The retailer crushed analysts' estimates for quarterly profit on lower inventories and strong demand for beauty products in November, signaling that attempts to trim inventory from 2022 highs were finally working ahead of the all-important holiday shopping season. Macy's has a market capitalization of about $4.77 billion and its shares are down nearly 15.79% this year. It is unclear whether Arkhouse and Brigade have the resources to execute on a deal of such a size, given that they have not previously done anything of this magnitude. A $2.4 billion bid that a group of investors led by Arkhouse submitted two years ago for real estate investment trust Columbia Property Trust was unsuccessful. Pimco subsequently acquired Columbia Property for $3.9 billion. https://www.reuters.com/markets/deals/investor-group-launches-58-billion-buyout-bid-macys-wsj-2023-12-10/

2023-12-11 20:40

Occidental launches first big purchase since Anadarko Reflects push by oil giants to secure new production Purchase will require taking on about $11 bln in debt HOUSTON, Dec 11 (Reuters) - Occidental Petroleum (OXY.N) on Monday agreed to buy closely-held U.S. shale oil producer CrownRock in a cash-and-stock deal valued at $12 billion including debt, expanding its presence in the largest U.S. shale oilfield. The deal comes amid a new wave of shale consolidation underpinned by Exxon Mobil's (XOM.N) $60-billion proposed deal for Pioneer Natural Resources (PXD.N) and Chevron's (CVX.N) $53-billion agreement for Hess (HES.N) in October. Big producers are using the post-pandemic profit boom to prepare for a future with lower oil prices, as they look to gain scale in basins they already operate to cut costs. "We found CrownRock to be a strategic fit," said Chief Executive Vicki Hollub. "Where we are looking at oil prices being long term, that it would help us in (oil) downturns." If approved, the CrownRock takeover would make Occidental a bigger player in the U.S. shale than Chevron and Hess combined. The deal is expected to close in the first quarter of 2024 and would boost Occidental's Permian production by 170,000 barrels of oil and gas per day in the Midland, to 750,000 boed. Occidental's total production was 1.2 million boed at Sept. 30. The deal will also add immediate cash flow for investors, Hollub said, or about $1 billion considering WTI oil at $70 per barrel. Occidental said almost half of CrownRock's 1,700 undeveloped locations could generate profits with WTI at $40 per barrel. "This acquisition adds scale that will be important to us for the Midland basin and will enable us to do cost over time," Hollub said. U.S. oil is trading at about $71 per barrel, encouraging higher output as members of the Organization of Petroleum Exporting Countries pare oil quotas. Occidental's shares rose 0.8% to $56.90. But not all analysts approved the deal, as Occidental just recently recovered from the widely criticized, debt-laden purchase of Anadarko Petroleum in 2019. "We are pretty negative on this deal," said Sankey Research analyst Paul Sankey. "You're adding a load of debt, when arguable you should be paying with shares." CrownRock would significantly expand Occidental's leverage, increase reliance on future asset sales and put buybacks on hold just as after the Anadarko acquisition, said Piper Sandler investment bank. Occidental said it will finance the purchase with $9.1 billion of new debt, the assumption of CrownRock's $1.2 billion of existing debt. It will issue $1.7 billion in common stock. Hollub said the company plans to reduce its debt by about $15 billion and by at least $4.5 billion in the next 12 months from asset sales and cash flow. Occidental had about $18.6 billion in long-term debt as of Sept. 30, and the deal would increase its debt to nearly $28 billion. The deal puts the onus on shareholders to pay off the debt, but fixes the return for doing so, said Cole Smead, CEO of Smead Capital Management, who owns about 5.9 million shares in its U.S. portfolio. "An all equity deal, in comparison, makes it tougher to buy back stock later," he said. North America may end up with only ten oil and gas after the current consolidation wave with Occidental being one of them, said Smead. Hollub said in a CNBC interview that Warren Buffett's Berkshire Hathaway (BRKa.N), which had helped finance the Anadarko purchase, was not involved in the CrownRock deal. Occidental said it will raise its quarterly dividend by 4 cents, to 22 cents a share, and expects to retain its investment-grade credit ratings. Reuters first reported in September that CrownRock was preparing to explore a sale that could give it an enterprise value of well over $10 billion. https://www.reuters.com/markets/deals/occidental-petroleum-buy-crownrock-12-bln-deal-2023-12-11/

2023-12-11 20:13

DUBAI, Dec 11 (Reuters) - The U.N.'s climate body on Monday published its latest draft text of the deal it hopes to reach at the COP28 summit in Dubai, which includes a range of actions countries could take to reduce emissions. The list did not refer directly to a phase out of fossil fuels, which was a key demand by the European Union and many developing countries that are especially vulnerable to climate change. The relevant section of the text said parties recognise "the need for deep, rapid and sustained reductions in GHG (greenhouse gases) emissions and calls upon Parties to take actions that could include, inter alia: (a) Tripling renewable energy capacity globally and doubling the global average annual rate of energy efficiency improvements by 2030; (b) Rapidly phasing down unabated coal and limitations on permitting new and unabated coal power generation; (c) Accelerating efforts globally towards net zero emissions energy systems, utilizing zero and low carbon fuels well before or by around mid-century; (d) Accelerating zero and low emissions technologies, including, inter alia, renewables, nuclear, abatement and removal technologies, including such as carbon capture and utilization and storage, and low carbon hydrogen production, so as to enhance efforts towards substitution of unabated fossil fuels in energy systems. (e) Reducing both consumption and production of fossil fuels, in a just, orderly and equitable manner so as to achieve net zero by, before, or around 2050 in keeping with the science; (f) Accelerating and substantially reducing non-CO2 emissions, including, in particular, methane emissions globally by 2030; (g) Accelerating emissions reductions from road transport through a range of pathways, including development of infrastructure and rapid deployment of zero and low emission vehicles; (h) Phasing out of inefficient fossil fuel subsidies that encourage wasteful consumption and do not address energy poverty or just transitions, as soon as possible." https://www.reuters.com/business/environment/new-cop28-draft-text-does-not-mention-phase-out-fossil-fuels-2023-12-11/

2023-12-11 20:12

COP28 climate change summit heads into final stretch New draft deal suggests 'reducing' use of fossil fuels Scraps previous call to 'phase out' coal, oil, gas EU, US, islands urge phase out; OPEC opposes DUBAI, Dec 11 (Reuters) - A draft of a potential climate deal at the COP28 summit on Monday suggested a range of measures countries could take to slash greenhouse gas emissions, but omitted the "phase out" of fossil fuels many nations have demanded - drawing criticism from the U.S., EU and climate-vulnerable countries. The draft has set the stage for contentious last-minute negotiations in the two-week summit in Dubai, which has laid bare deep international divisions over whether oil, gas and coal should have a place in a climate-friendly future. A coalition of more than 100 countries have been pushing for an agreement would for the first time promise an eventual end to the oil age - but are up against opposition from members of the oil producer group OPEC. COP28 President Sultan Al Jaber - who has previously used the conference to call for a paradigm shift - urged the nearly 200 countries at the talks to redouble their efforts to finalize a deal ahead of the scheduled close of the conference on Tuesday, saying they "still have a lot to do". "You know what remains to be agreed. And you know that I want you to deliver the highest ambition on all items including on fossil fuel language," he said. The new draft of a COP28 agreement, published by the United Arab Emirates' presidency of the summit, proposed various options but did not refer to a "phase out" of fossil fuels. Instead, it listed eight options that countries could use to cut emissions, including: "reducing both consumption and production of fossil fuels, in a just, orderly and equitable manner so as to achieve net zero by, before, or around 2050". Other actions listed included tripling renewable energy capacity by 2030, "rapidly phasing down unabated coal" and scaling up technologies including those to capture CO2 emissions to keep them from the atmosphere. Alden Meyer, a senior associate at environmental think tank E3G, criticised the new deal as "basically an a la carte menu that allows countries to individually choose what they want to do." Despite the fact emissions from burning fossil fuels are by far the main driver of climate change, 30 years' worth of international climate negotiations have never resulted in a global agreement to cut their use. The text triggered a protest from dozens of delegates who stood in near silence, holding hands and lining the long route into a room where negotiators gathered, forcing them to run an eerie gauntlet before getting back to work. "Please give us a good text," one delegate pleaded as negotiators filed in. U.S. Special Climate Envoy John Kerry told the meeting, which ran for around three hours, that the draft agreement had to be strengthened. "We're not where we're meant to be in terms of the text," Kerry said. "Many of us have called for the world to largely phase out fossil fuels, and that starts with a critical reduction this decade." Speaking with voice worn hoarse by the summit, he said the outcome of COP28 was existential: "This is a war for survival". EU chief negotiator Wopke Hoekstra told reporters the draft was "clearly insufficient and not adequate to addressing the problem we are here to address." Representatives from Pacific Island nations Samoa and the Marshall Islands, already suffering the impacts of rising seas, said the draft was a death sentence. "We will not go silently to our watery graves," said John Silk, the head of the Marshall Islands delegation. "We cannot sign on to a text that does not have strong commitment on phasing out fossil fuels," Samoa environment minister Cedric Schuster told reporters. Dan Jorgensen, the Danish climate minister, said he believed many countries opposed the current text. "So, it was clear that this is only the starting point and that we are not even close to getting a result." A new draft document is expected early on Tuesday, which would leave little time for further disagreement ahead of the conference's scheduled close at 0700 GMT. COP summits rarely finish on schedule. Sources familiar with the discussions said the UAE had come under pressure from Saudi Arabia, de facto leader of the OPEC oil producers' group of which UAE is a member, to drop any mention of fossil fuels from the text. Saudi Arabia's government did not respond to requests for comment on Monday. CONSENSUS It was unclear if China, currently the world's top greenhouse gas emitter, supported the draft. Leaving their pavilion late on Monday, senior members of the China delegation, including chief envoy Xie Zhenhua, did not respond to questions. But observers noted that some of the language in the document was in line with China's previous policy positions, as well as parts of the Sunnylands agreement signed by China and the United States in November. The Sunnylands agreement did not use phrases like "phasing out" but instead called for the accelerated substitution of coal, oil and gas with renewable energy sources, and backed the pledge to triple renewable energy by 2030. Speaking to ministers and negotiators on Sunday, a representative for Saudi Arabia's delegation said a COP28 deal should not pick and choose energy sources but should instead focus on cutting emissions. That position echoes a call made by OPEC in a letter to its members earlier in the summit, seen by Reuters, which asked them to oppose any language targeting fossil fuels directly. Deals at U.N. climate summits must be passed by consensus among the nearly 200 countries present. Developing nations have said any COP28 deal to overhaul the world's energy system must be matched with sufficient financial support to help them do this. "We need support as developing countries and economies for a just transition," said Colombia's Environment Minister Susana Muhamad. Colombia supports phasing out fossil fuels. Despite the rapid growth of renewable energy, fossil fuels still produce around 80% of the world's energy. Negotiators told Reuters that other OPEC and OPEC+ members including Russia, Iraq and Iran, have also resisted attempts to insert a fossil fuel phase-out into the COP28 deal. https://www.reuters.com/markets/commodities/new-cop28-draft-deal-stops-short-fossil-fuel-phase-out-2023-12-11/

2023-12-11 19:52

Dec 11 (Reuters) - The U.S. Treasury Department on Monday said its Financial Crimes Enforcement Network (FinCEN) unit is planning to propose a long-awaited rule aimed at curbing money laundering in real estate in early 2024. The regulator is also aiming to issue a notice of proposed rulemaking that would require investment advisers flag suspicious transactions to regulators. THE TAKE The proposal, which FinCEN was previously slated to unveil this year, is expected to require real estate professionals report the identities of the beneficial owners of companies buying real estate in cash to the regulator. Anti-corruption advocates have been pushing for years for regulators to close a loophole they say allows criminals to hide money in U.S. real estate. THE CONTEXT While banks have long been required to understand the source of customer funds and report suspicious transactions, no such rules exist nationwide for the real estate industry. Criminals have for decades anonymously hidden ill-gotten gains in real estate, Treasury Secretary Janet Yellen said earlier this year. The existing regulatory regime for real estate is easy to skirt, anti-corruption advocates have said. KEY QUOTE The proposal "will be will be an important step toward bringing greater transparency to this sector," the agency said in a statement. "Treasury is also considering next steps with regard to addressing the illicit finance risks associated with the U.S. commercial real estate sector." KEY QUOTE "This long-delayed step would plug a gaping loophole in our anti-money laundering rules to make sure that drug traffickers, Russian oligarchs, and environmental criminals can't hide their wealth in U.S. real estate," said Ian Gary, executive director the Financial Accountability and Corporate Transparency (FACT) Coalition. https://www.reuters.com/markets/us/us-flags-early-2024-new-rule-targeting-real-estate-money-laundering-2023-12-11/